WIP Finance for Solicitors — What It Is, How It Works and When to Use It

Summary: WIP finance (work‑in‑progress finance) lets law firms unlock cash tied up in billed or unbilled fees. It’s useful to bridge predictable cashflow gaps, fund growth or acquisitions, and cover large disbursements or payroll. WIP facilities come in several models (advances against unbilled WIP, invoice finance, case or litigation finance) and typically involve lender reporting, security and fees. UK Business Loans introduces solicitors to specialist lenders and brokers who understand SRA rules and solicitor accounting—start with a Free Eligibility Check to see options for your firm.

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Table of contents

• Quick answer: What WIP finance means for law firms
• How WIP finance works (step‑by‑step)
• Typical funding models and who lends
• When WIP finance is appropriate — common use cases
• Benefits of WIP finance for law firms
• Risks, regulatory and compliance considerations
• Typical costs & pricing structure
• Eligibility and documents lenders usually ask for
• How to choose the right WIP finance option and lender
• Alternatives to WIP finance
• Example case study
• FAQs
• Ready to check eligibility?
• Related resources

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Quick answer: What WIP finance means for law firms

WIP (work‑in‑progress) represents fees you have earned or are in the process of earning but haven’t yet been paid for—billed or unbilled. WIP finance advances a percentage of that value to the firm, providing immediate liquidity while the firm waits for client settlement.

It is most suitable for firms with predictable billing and strong likelihood of collection, where a short‑to‑medium term cash injection will allow continuity of payroll, disbursements, practice growth or acquisition activity.

How WIP finance works (step‑by‑step)

1. Lender or broker reviews your WIP, billing history and debtor quality.
2. They set a facility: an agreed advance rate (often a percentage of billed/unbilled WIP) and security / reporting requirements.
3. Security may include assignment of debts, a debenture or access to ledgers; client money must remain protected under SRA rules.
4. Once agreed, you receive funds to cover payroll, disbursements, growth costs or transaction fees.
5. Repayment follows collections or an agreed schedule; reserves/retentions may be held until invoices clear.

Typical WIP funding models (brief)

• WIP lending / WIP refinance: Advances against unbilled work based on valuation of fees and likelihood of collection.
• Invoice finance for solicitors: Tailored invoice facilities (disclosed or confidential) for billed work.
• Case or litigation funding: Funding tied to specific matters or litigation portfolios.
• Working capital facilities: Overdrafts or short-term loans backed by WIP and firm assets.

Who lends — lenders & brokers that specialise in solicitors

Specialist invoice finance firms, niche legal sector lenders, some commercial banks and specialist brokers offer WIP solutions. Choose providers who understand solicitor accounting and SRA account rules to limit operational friction.

When WIP finance is appropriate — common solicitor use cases

• Short-term cashflow gaps: Large conveyancing settlements, delayed client payments, or long debtor days causing payroll pressure.
• Growth phase: Hiring fee-earners or opening new offices before billed income catches up.
• Practice acquisitions: Financing the purchase and immediate working capital when WIP forms part of the acquisition value.
• Case-specific costs: Paying out disbursements or expert fees in high-cost litigation while awaiting recovery.
• Seasonal or cyclical peaks: Managing professional indemnity renewals or seasonal dips in billings.

WIP finance is not appropriate where WIP is weakly documented, unlikely to be collected, or where client money rules would be breached by the proposed structure.

Benefits of WIP finance for law firms

• Immediate working capital without diluting equity.
• Keeps payroll, case disbursements and business operations running smoothly.
• Enables faster hiring or office expansion to capture growth opportunities.
• Flexible short‑term funding compared with repeatedly increasing overdraft usage.
• Can support acquisitions where WIP is core to purchase valuation.

Risks, regulatory and compliance considerations

WIP facilities introduce operational, legal and regulatory impacts. Key points to watch:

SRA client money rules & protecting client funds

Any funding arrangement must not compromise SRA Accounts Rules. Client money should remain ring‑fenced and must not be used as security unless explicitly allowed and documented. Check SRA guidance or seek regulated advice where needed. For SRA guidance, see the Solicitors Regulation Authority client money rules (link below).

SRA rules and guidance

What lenders typically require

• Assignment of invoices or WIP, access to ledgers and reporting rights.
• Fixed or floating charges, debentures or personal guarantees in some cases.
• Enhanced controls: periodic audits, covenant reporting and minimum service fees.

Risks to watch

• Fee structure and hidden charges can erode margins—compare full cost schedules.
• Security arrangements may limit future borrowing or sale options.
• Operational burden: more administration, reporting and third‑party access to client and billing data.

Always confirm how the facility interacts with client accounts and ensure your accounting team and compliance officer are involved before signing.

Typical costs & how pricing is structured

Pricing varies by lender and complexity. Common cost elements include:

• Interest on drawn advances (daily or monthly rates).
• Set‑up and arrangement fees.
• Ongoing service fees or minimum monthly charges.
• Collection or administrative fees for handling receipts.
• Reserve / retention amounts held back until invoices clear.

Ask for worked examples showing net funds received and total costs over realistic collection timelines.

Eligibility and documents lenders usually ask for

Typical checks include billing and collection performance, quality of WIP, firm turnover and practice area mix. Common documents:

• Management accounts (3–12 months).
• Aged WIP report and client ledgers.
• Trial balance and bank statements.
• Details of client money arrangements and SRA compliance documentation.
• Identification documents for directors where required.

We can match you with lenders who understand solicitor accounting—start with a Free Eligibility Check.

How to choose the right WIP finance option and lender

Balance cost, speed, operational impact and security. Key questions to ask prospective lenders or brokers:

• Will the facility require an assignment of fees or only a disclosure?
• How does the lender treat client funds and SRA compliance?
• What reporting, auditor access and day‑to‑day controls are required?
• What fees apply (upfront, ongoing, contingency) and are there minimum charges?
• What exit options and notice periods are included?

Why use a specialist introducer like UK Business Loans

Finding the right lender can be time‑consuming. UK Business Loans connects solicitors with specialist lenders and brokers who understand legal practice accounting, saving you time and helping you compare realistic options. Our enquiry is a free, no‑obligation information request that helps match your firm to appropriate partners. Get Quote Now.

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Alternatives to WIP finance

• Bank overdraft or short‑term loan (suitable for small, short gaps).
• Unsecured business loan (if you prefer simpler security).
• Invoice finance on billed invoices only.
• Partner or shareholder capital injection.
• Staged billing or improved invoicing / collection practices.

Each alternative has pros and cons depending on term, cost and impact on client money obligations.

Example illustrative case study

Example: A regional solicitors’ firm with £120k of WIP across conveyancing matters was awaiting settlements over 45–60 days. They secured an 80% WIP advance of £96k (minus 2% facility fees and a small reserve). The advance covered two months’ payroll and urgent disbursements, avoiding staff cuts and enabling them to accept new instructions. Collections repaid the facility within eight weeks; total cost was equivalent to a short commercial loan for the period—cheaper than repeated overdraft use.

FAQs

Is WIP finance the same as invoice finance?

Not exactly. Invoice finance usually applies to billed invoices; WIP finance can include advances against unbilled or in‑progress work. Lenders use different underwriting approaches for each.

Will WIP finance breach SRA client account rules?

Funding must not compromise client money protections. Lenders experienced with solicitors will structure facilities to respect SRA rules—always confirm with your compliance team.

How quickly can I get funds?

Specialist brokers and lenders can sometimes deliver funds within days once checks and documentation are complete; more complex facilities take longer.

How much of my WIP can I borrow against?

Advance rates vary. Typical ranges are 50–90% of the assessed collectible value depending on debtor quality, billing history and security.

Will lenders take ownership of client files?

No—lenders generally take security over fees and receivables, not client files. Ensure contractual terms are clear before signing.

Will using a broker damage client relationships?

Not if handled professionally. Most lenders work behind the scenes; transparent processes protect client confidentiality and client money obligations.

Ready to check eligibility?

If your firm has collectible WIP and you need a cashflow solution for payroll, disbursements, growth or acquisition, start with a simple enquiry. Our form gathers basic details so we can connect you with lenders or brokers who specialise in working with solicitors. This is not an application—just information to match you to the right partners.

Get Started — Free Eligibility Check

We’re an introducer — we don’t lend and we don’t provide regulated financial advice. Submitting an enquiry is free and no obligation; we only share your details with selected partners who can help. Enquiries do not affect your credit score.

Related resources

• solicitors business loans — broader industry finance options and industry page
• Invoice finance for solicitors (internal resource)
• Business loans for legal firms (internal resource)

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Need help now? Complete a short enquiry and we’ll match your firm with specialist lenders and brokers who understand solicitor accounting and SRA requirements. Free Eligibility Check — Get Quote Now.

1. What is WIP finance for solicitors?
WIP (work‑in‑progress) finance advances cash against billed or unbilled fees a firm has earned but not yet collected, helping solicitors bridge gaps between completing work and client payments.

2. How much of my WIP can I typically borrow?
Advance rates vary by lender and debtor quality but commonly range from about 50% to 90% of the assessed collectible WIP value.

3. Will WIP finance breach SRA client money rules?
No—properly structured WIP facilities from lenders experienced with solicitors will preserve SRA client account protections, but you must confirm the exact structure with your compliance team before proceeding.

4. How quickly can my firm receive funds with WIP finance or an invoice finance facility?
Turnaround depends on complexity and documentation, but specialist lenders or brokers can sometimes advance funds within days, while more complex facilities may take several weeks.

5. What costs and fees should I expect with WIP finance?
Typical costs include interest on advances, arrangement or set‑up fees, ongoing service or minimum monthly charges, collection/admin fees and reserves or retentions until invoices clear.

6. What documents and evidence do lenders usually require for WIP or business loan eligibility?
Lenders typically ask for recent management accounts, aged WIP and client ledgers, trial balance, bank statements, SRA compliance details and ID for directors/partners.

7. Which lenders or brokers provide WIP and invoice finance for law firms in the UK?
Specialist invoice finance firms, niche legal‑sector lenders, some commercial banks and regulated brokers that understand solicitor accounting and SRA rules commonly provide WIP solutions.

8. Will submitting an enquiry via UK Business Loans affect my credit score?
No—making a free eligibility enquiry with UK Business Loans does not affect your credit score; lenders may carry out credit checks only if you proceed with an application.

9. When should a solicitor choose WIP finance over a general business loan?
Consider WIP finance when you have collectible WIP and need short‑to‑medium term liquidity for payroll, disbursements, growth or acquisitions, whereas unsecured business loans may suit firms wanting simpler security or longer terms.

10. How do I start a Free Eligibility Check through UK Business Loans?
Complete the short online enquiry form to share basic firm and funding details and be matched—at no cost or obligation—with specialist lenders and brokers who can discuss suitable WIP or business loan options.